LG Shifts from Scale to Profit: If Samsung is the one making aggressive moves, then in comparison, LG Electronics has adopted a more conservative strategy. Liu Chengyong, General Manager of Brand Marketing for LG Electronics in Greater China, revealed that LG has also been affected by the larger economic environment. However, LG Electronics has made adjustments to its product lineup and business model, not focusing on volume but rather shifting this year's strategy to prioritize profit. "After the adjustment, there was an improvement in profits in January," said Liu Chengyong. He believes that previously, when the market environment was still good, all companies focused on sales volume and market share. But under the current circumstances, strategies must change.
According to statistics from the market research firm GfK, in 2011, neither Samsung nor LG ranked in the top five for color TVs in China. Liu Budust pointed out that under unfavorable market conditions, appropriately scaling back operations and reducing costs is a common winter-survival tactic used by enterprises.
In fact, Samsung and LG also differ in their attitudes towards smart TVs—Samsung will continue to focus on promoting smart TVs this year, believing them to be the direction of the industry. On the other hand, LG believes that the development of smart TVs is constrained by internet speed and IT infrastructure, with another one or two years needed for the necessary infrastructure to be fully in place. "We feel that this year will still be dominated by 3D TVs," they stated.
Domestic Enterprises' Profits May Not Match Last Year's: Home appliance expert Liu Budust analyzed that changes in the strategies of foreign enterprises this year will affect the operations of domestic enterprises. "For example, taking Samsung's approach as an example, Samsung's efforts in rural markets will seize market share from domestic enterprises. If Samsung adopts a low-price strategy, it will put pressure on domestic enterprises, affecting their profit performance this year."
An analyst from AVC Consulting indicated that if last year domestic enterprises could be said to have quietly profited, this year domestic enterprises themselves are already under considerable pressure. The decline in panel prices last year brought greater profit margins, and due to factors such as exchange rates and natural disasters, even during peak seasons like holidays, foreign enterprises were relatively restrained in using price tactics. As a result, domestic enterprises gained both market share and profits. This year, panel prices show signs of warming up, so the profit performance of domestic enterprises will definitely not match last year's.